June 26, 2020 / 11:53 AM / 14 days ago

Mexican economy shrinks record 17.3% in April as industry swoons

FILE PHOTO: Workers are seen in a building undergoing construction at Mexico City, Mexico January 30, 2020. REUTERS/Andres Martinez Casares

MEXICO CITY (Reuters) - Mexico’s economy posted a record contraction in April, official data showed on Friday, as the effects of the coronavirus lockdown devastated economic activity, particularly in manufacturing.

Adjusted for seasonal swings, Latin America’s second-biggest economy contracted 17.3% from March, the biggest fall since modern data began being published in early 1993, according to figures put out by national statistics agency INEGI.

The decline, however, was not as sharp as the 19.4% drop forecast by a Reuters poll of economists.

In unadjusted terms, the economy shrank 19.9% in April compared with a year earlier, the figures showed.

A breakdown of the data showed that primary activities such as farming, fishing and mining shrank 6.4% from March. Secondary activities, which include manufacturing, plummeted 25.1% and tertiary activities, which cover the service sector, fell 14.4%.

Auto production almost ground to a halt in April, falling by 98.8% on the year, and the country’s main industry group has forecast output in the sector could drop by nearly a third in 2020.

The government hopes the economy fared slightly better in May, when authorities gradually began to permit sectors such as carmaking, mining and construction to start up again.

Reporting by Dave Graham; Editing by Steve Orlofsky and Paul Simao

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